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The cryptocurrency market is going through a difficult stretch. In my view, this selloff is not a story about broken technology or failed projects. It is a story about how tightly digital assets now track the mood of traditional finance. Bitcoin has fallen 2.49 per cent to US$81,755.72 in 24 hours. That move underperforms a flat S&P 500.

At the same time, Bitcoin’s 24-hour correlation with the S&P 500 sits at a strong 81 per cent. That correlation tells me the current pressure comes mainly from macro forces rather than from crypto-native news. Ethereum has suffered even more. It dropped 4.34 per cent to US$2,434.26 in the same period, a decline that outpaced Bitcoin’s fall and underscores its role as a high-beta bet on the broader crypto market.

When a major digital asset moves in lockstep with equities, traders should pay close attention to inflation data, bond yields, and central bank expectations. Those forces now matter as much as any blockchain upgrade or adoption headline.

The first major force behind this retreat is institutional selling. US spot Bitcoin ETFs recorded roughly US$681 million in net outflows for the week ending October 9. That reversal ended a three-week inflow streak. This shift matters because these funds had become a reliable source of demand. Large investors are now showing caution as Treasury yields rise and inflation worries persist.

A steady buyer has become a seller, and that shift weakens the market’s foundation. I will be watching daily ETF flow data to see if this pressure continues or fades. If outflows persist, Bitcoin will struggle to build any durable bounce. If flows stabilise, the market can at least find a floor. The ETF channel is now one of the clearest windows into institutional sentiment, and it currently shows fear.

Also Read: Below US$82,620 Bitcoin could test US$81,154 next

A second force is a leverage flush. The decline triggered forced selling across derivatives markets. In the past 24 hours, liquidations wiped out more than US$406 million in leveraged long positions. That mechanical unwind creates a cascade. Forced selling generates more sell orders, which push prices lower. This pattern is common after a rally.

Crowded-in bullish bets get wiped out, and the market cools off violently. The key signal to watch is funding rates and open interest. When those metrics stabilise, it suggests the market has cleared excess leverage. Until then, the risk of more sudden drops remains high. Traders who used too much borrowed capital have learned a painful lesson. The market rarely rewards one-sided positioning for long.

Ethereum faced an even sharper version of this derivatives-driven pain. A total of US$115.19 million in ETH long positions were forced to close within 24 hours. That figure accounted for the largest share of a total crypto liquidation of US$488.61 million. The forced selling from overextended longs turned a moderate pullback into a steep decline. High leverage acted as fuel. When stop-losses triggered, they accelerated the move lower. I will be watching the aggregate funding rate.

A move deeper into negative territory would signal that long unwinding continues. That would keep Ethereum under pressure in the near term. For now, the derivatives market remains the main driver of ETH price action. Spot buyers have not stepped in with enough force to absorb the supply.

Also Read: Bitcoin’s US$83,000 test: Can institutional demand hold the line?

The broader backdrop adds another layer of anxiety. No clear Ethereum-specific catalyst appeared. The move was part of a sector-wide retreat. Major altcoins like Solana and XRP fell by similar amounts. Investors are cautious ahead of the US CPI report on October 14. They are also reacting to roughly US$681 million in net outflows from spot Bitcoin ETFs last week.

Rising 10-year Treasury yields toward 5.3 per cent add to the risk-off mood. Ethereum now trades as a high-beta risk asset. It responds strongly to shifts in market sentiment and macro liquidity. That reality means crypto traders cannot ignore traditional inflation data. A single CPI print can change the direction of the entire market within minutes.

The near-term outlook for Bitcoin hinges on the October 14 CPI report. A favourable reading could help Bitcoin hold the US$81,300-US$82,000 support band. That outcome could open a path toward reclaiming US$84,300. A hotter print risks restarting ETF outflows and a deeper test of support near US$79,000. Bitcoin is in a holding pattern.

Its immediate trend will be driven by traditional macroeconomic data, not by crypto-specific developments. I will watch how the market reacts at US$82,000 immediately after the CPI release. A strong bounce from that level would signal that buyers still see value. A clean break below it would confirm that sellers remain in control.

Also Read: Light liquidations and flat funding: Is Bitcoin about to explode?

Ethereum’s technical picture is more fragile. The asset has broken below its 50-day moving average near US$2,558 and key support at US$2,500. The US$2,360 to US$2,420 zone is now critical daily demand. If ETH holds this area, a relief rally toward US$2,560 is possible. Oversold conditions support that view. The 7-day RSI sits at 26.64, a reading that often precedes a short-term bounce when macro fears ease. A decisive break below US$2,360 could trigger another wave of selling.

The next major support cluster sits around the 100-day moving average near US$2,240. A hot CPI print that breaks support risks a drop toward US$2,220-US$2,280. Ethereum needs a macro tailwind to reverse its current course. Without one, rallies will likely remain short-lived.

My overall view is bearish for the near term. Bitcoin is experiencing a withdrawal of institutional capital and a flush of overleveraged positions. Ethereum faces the same pressures, but with even greater intensity, due to its derivatives exposure. The macro environment remains tense. Sentiment is weak. At the same time, the market is testing important levels.

Bitcoin must hold above US$81,300 after the CPI data. Ethereum must reclaim and hold above US$2,500. If those levels fail, another wave of defensive selling could follow. If they hold, a relief bounce is possible. The October 14 inflation report will decide which path the market takes. I will keep watching ETF flows, funding rates, and the reaction at those key price zones.

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